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Chinese Institutions Will Have To Replace Their Foreign Computers and Software

Chinese Institutions Will Have To Replace Their Foreign Computers and Software

To say the least, Beijing’s announcement to ban the use of computers and software foreign to Chinese institutions within three years was like a bomb. Between potential loss of income and practical difficulties, our explanations.

The Chinese government has just asked all state offices and public institutions in the country to put in place a transition plan to ban all foreign computer hardware (including computers) and software within three years. Obviously, the main American suppliers such as Microsoft, Dell and HP are targeted in a climate of economic war with Washington, symbolized on the technology front by the Huawei case.

According to the Financial Times, this is the first directive of its kind to be officially adopted, although it is part of a broader campaign by the Chinese government to increase the country’s reliance on national technologies, which are described as more “secure and controllable”.

According to the assessments of China Securities, an expert firm, between 20 and 30 million North American electronic devices currently used by the institutions concerned will have to be replaced.

A Policy Measure That is Difficult To Implement in Practice

The central office of the Chinese Communist Party has even reportedly already planned this effort, estimating that 30% of the equipment will have to be replaced in 2020, 50% in 2021 and the remaining 20% in 2022.

To speed up the process, it will be able to rely on a cybersecurity law passed in 2017 that provides for such a change in the origin of the equipment used, but which had not yet been fully implemented beyond the increasing use of Lenovo computers by Chinese officials.

And while Chinese institutions will probably be able to do without American computers, they will have a harder time abandoning operating systems developed in the United States (Windows and macOS) that have few alternatives (the use of Kylin OS is cited as a possibility).

Especially since the Chinese Government Edition of Windows 10 proposed since 2017 would no longer be authorized. Finally, some points of application of this measure have yet to be defined, because while Lenovo (for example) is a Chinese brand, its computers incorporate Intel processors and many technologies from across the Atlantic.

When asked by Financial Times journalists, Jefferies analysts estimate that major US technology companies generate about 150 billion in annual revenue in China. This is a huge figure that must nevertheless be put into perspective since it includes sales to the private sector, which is not affected by this measure.

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